Apollo Investment Shares Soar After Upgrades

CHARLOTTE, N.C. (AP) — Shares of Apollo Investment Corp. surged Friday after an analyst upgraded the investment management company, citing an attractive share price and saying concerns over the company's debt obligation are unnecessary.

BMO Capital Markets analyst David Chiaverini raised his rating to "Outperform" from "Market Perform" but lowered his share price target $2 to $5.

"Although we agree that a covenant breach would warrant Apollo's stock trading at this low level, we do not believe Apollo will breach a debt covenant in the medium term," Chiaverini wrote in a research note to clients.

He said he expects Apollo to "remain in compliance with its debt covenants owing to its ability to sell investments and pay down debt with the sale of proceeds."

Debt covenants are commitments borrowers make to lenders as a condition of their loans, usually to remain above a certain financial threshold. When they fall below that threshold, lenders often get the right to demand their money back sooner.

Shares of Apollo Investment gained 88 cents, or 32.6 percent, to $3.58 in afternoon trading. Shares have traded between $1.99 and $20.29 over the past 52 weeks.